Public Bill Committee

[Frank Cook in the Chair]

Frank Cook: May I first offer abject but sincere apologies? For some reason, I was under the impression that we were to commence our business of the day at 9.25 am, which is the more usual time of commencement of our sittings.

Clause 4

Standards of regulation, education and training

Jonathan Djanogly: I beg to move amendment No. 267, in clause 4, page 2, line 36, at beginning insert ‘(1)’.

Frank Cook: With this it will be convenient to discuss the following amendments: No. 216, in clause 4, page 2, line 36, leave out ‘assist in the maintenance and development’ and insert ‘ensure the development and maintenance’.
No. 215, in clause 4, page 3, line 1, at end insert—
‘( ) In relation to subsection (1)(b), the Board must satisfy itself that appropriate standards of education and training, including training in client care, are being maintained by approved regulators and, should it not be so satisfied in respect of any particular education and training scheme or schemes, the Board must consider withdrawal of its approval of that scheme or those schemes.’.

Jonathan Djanogly: Good morning, Mr. Cook. Amendment No. 267 is not the most hard-hitting of amendments. It is consequential, so I shall overlook it and move on to amendment No. 215.
Clause 4 imposes a duty on the Legal Services Board to assist in the maintenance and development of standards of regulation by approved regulators of regulated persons, and in the education and training of those persons. For example, it may issue guidance on or disseminate examples of good education and training practices or principles of professional conduct that have been developed for reserved legal activity by one approved regulator to all approved regulators.
Amendment No. 215 has been tabled on a probing basis. It stresses the importance of the board’s role in education and training. As the overarching regulatory body that oversees the work of all other regulatory bodies, the board must understand the importance of its role as a supervisor and ensure that all regulators meet the necessary standards. Accordingly, it is important that it is instructed to withdraw its approval of any education or training schemes that do not satisfy the relevant criteria.
The approval of the LSB as given to regulatory bodies should be regarded as an endorsement oftheir suitability and mean that consumers will have confidence in them. Therefore, it could be seen as necessary that such approval is given only when it is deserved, not in the case of regulatory bodies that fall short of the necessary standards.

John Mann: I welcome the thrust of amendment No. 216. It is such a good amendment that I was almost tempted to add my name to it. The words
“assist in the maintenance and development of standards”
 seem to be rather weak. The Minister should contemplate using the word “ensure” because it gives a more appropriate and clearer direction to the board and also sends out a message about the role of the board to the professions. The amendment is worthy of the Minister’s thoughtful consideration over the next day or two.

Bridget Prentice: Obviously, I agree that it is part of the board’s remit to work with approved regulators to achieve high standards across the legal sector. That was the view of the Joint Committee on the Draft Legal Services Bill and we accepted its recommendation. The Bill explicitly states that intention in clause 4. However, I have a different view on the nature of that duty. Clause 4 states:
“The Board must assist in the maintenance and development of standards”
in relation to the regulation and the education and training of people authorised by the regulators. I think that that gives the approved regulator the necessary freedom to tailor its standards and training regimesin a way that is appropriate to its own area of legal expertise.
Although I heard what my hon. Friend had to say, I think that it is appropriate to use the word “assist” because it is about proportionate regulation. We have discussed proportionality during the proceedings of the Bill. The same must apply in this area. If we said that the board had a duty to “ensure” the development and maintenance of those standards, it would become a more interventionist approach. I am not surethat that sits comfortably with effective oversight regulation. Therefore, I hope that the hon. Member for Huntingdon will withdraw the amendment in the knowledge that we are attempting to agree that education and training standards are important, but that assistance is the right way forward for the board’s role in relation to the approved regulator.

Jonathan Djanogly: I take the Minister’s point about the need for proportionate intervention. However, there is a subtle difference here. If the legal services are not performed in accordance with the provisions of the Bill, the Legal Services Board need not act because the regulatory bodies will deal with the matter. If there isa problem in respect of development and training schemes with the regulatory bodies themselves, the Legal Services Board should act in their place because there is no supervisory body above it. Therefore, it could be said that it is the responsibility and obligation of the Legal Services Board. The board should not just assist in the maintenance and development of the education and training schemes, but at some point be able to take control. There may be a case for turning the amendment on its head, so that if the board is not satisfied it should consider withdrawing its approval for schemes.

Bridget Prentice: The hon. Gentleman makes an important point. If the board felt that the arrangements had an adverse impact on the regulatory objectives, it could intervene and have them changed. The Bill as it presently stands responds to the very important point that he is making.

Jonathan Djanogly: I hear the Minister on that point of clarification. I will go away and look at it. I thank her for saying that. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 ordered to stand part of the Bill.

Clauses 5 to 7 ordered to stand part of the Bill.

Clause 8

The Consumer Panel

Jonathan Djanogly: I beg to move amendment No. 221, in clause 8, page 3, line 31, at end insert—
‘( ) The approval of the Lord Chancellor is required for the appointment of a person to be the chairman or to be another member of the Panel.’.
We now move on to the consumer panel, whichwas debated at some length in the other place. On reflection, we think that several items need to be considered again or in a slightly different way. The amendment was proposed to us by the Law Society, and we tabled it as a probing amendment. It would make the Lord Chancellor responsible for approving appointments to the consumer panel, to safeguardthe panel’s independence. We need to ensure that appointments to the consumer panel are made andare seen to be made objectively. That is why we need someone—the amendment suggests the Lord Chancellor —to oversee the appointments process.

John Hemming: The amendment has been tabled under our names, too. The process is similar to the way in which Ofcom operates, and we are going back to that usual word “independence” and the idea of what is independent of what. The amendment would give the consumer panel some independence of the body that it challenged, in theory. Unusually, we see additional powers in the amendment for the Government.

Bridget Prentice: I was a little concerned when the hon. Member for Huntingdon said that this was a probing amendment, because I want to be very positive about it. I accept his arguments and those of the consumer groups. Although I cannot say that I will accept the amendment, I shall take it away and consider it, and I hope to be able to say something more positive about it in the future. I can see the logic of what both hon. Gentlemen have said.

Simon Hughes: I just love the gradualist way that Ministers give in—they never do so at stage one, for fear that something is wrong, but only after a little careful consideration. It is welcome, none the less.

Bridget Prentice: Just to clarify for some membersof the Committee, there is collective responsibility in Government and we have to ensure that we bring everyone with us in the course of such matters.

Frank Cook: Mr. Djanogly, put an end to this banter.

Jonathan Djanogly: I shall do my best, Mr. Cook. We are happy with the Minister’s response, accept that shewill come back with a suitable amendment and look forward to seeing it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Jonathan Djanogly: I beg to move amendment No. 208, in clause 8, page 4, line 3, at end insert—
‘(c) corporate users of such services.’.

Frank Cook: With this it will be convenient to discuss the following amendments: No. 219, in clause 8, page 4, line 3, at end insert ‘, and
(c) qualified but non-practising solicitors who, in their professional capacity, use or purchase services provided by persons who are authorised persons in relation to activities which are reserved legal activities.’.
No. 209, in clause 8, page 4, line 11, after ‘(d)’ insert 
‘save in respect of a person appointed to represent corporate users of reserved legal activities.’.
No. 220, in clause 8, page 4, line 12, at end insert
‘, except for those authorised persons referred to under subsection 4(c).’.

Jonathan Djanogly: Amendments Nos. 209 and 220 are complementary to amendments Nos. 208 and 219. Clause 8 will require the Legal Services Board to set up and maintain a consumer panel—a panel of persons whose task will be to represent consumers’ interests, as defined by clause 208. Appointments to the panel will be made by the Legal Services Board and one of the members of the panel will be appointed its chairman by the board.
Clause 8 sets out the categories of person who may not sit on the panel. Subsection (4) will require the board to ensure that the membership of the consumer panel gives a fair degree of representation to:
“those who are using (or are or may be contemplating using), in connection with businesses carried on by them, services provided by persons who are authorised persons in relation to activities which are reserved legal activities, and...those who are using (or are or may be contemplating using) such services otherwise than in connection with businesses carried on by them.”
 However, we believe that it is also necessary that the consumer panel should include representatives of the corporate users of legal services and qualified but non-practising solicitors who use or purchase services in their professional capacity, as well as individual and small business representatives. To enable that, it is necessary to remove the prohibition on authorised persons serving as members of the consumer panel, as far as any representative of corporate users of legal services is concerned.
One of the great purposes of the Bill is to increase consumer protection, so the Minister needs to explain why certain consumers are to be disadvantaged and not given the same protection as others. We thought that the idea of the consumer panel was that it should represent all, not just some, consumers of legal services. The Government agreed on the need to ensure that a range of voices should be heard on the consumer panel.
Only by ensuring that the Legal Services Boardgives membership to a fair and proportionate number of corporate users and qualified but non-practising solicitors can the consumer panel truly call itself representative of consumers. The thousands of in-house lawyers are a growing and important part of the consumer body of legal services; they are possibly the largest such consumers outside the Government. It seems unfair that they should be excluded from representation on the so-called consumer panel.
On 12 June, the General Counsel 100 group wrote to the City of London Law Society expressing its concerns. I have been passed a copy of the letter:
“As you know, GCl00 is the representative body for in-house counsel and company secretaries of the top...FTSE companies. Legal services from external law firms are necessary to the efficient running of the organisations for which our members work and it is our members who are responsible for arranging the purchase of these services.
We would welcome an amendment to the Bill in the terms you have suggested allowing for representation of in-house counsel on the Consumer Panel. Without this, we are concerned that the new regulatory regime for legal services will not be suited to our needs and those of the law firms we use. If this is the case regulation may well impact on the global competitiveness of UK City law firms and our companies will look to other jurisdictions for their legal advisers.”
Our concern is that, if those consumers continued to be excluded, the consumer panel could lose its legitimacy and therefore much of its ability to be productive.

John Hemming: We are also inclined to support this group of amendments, because the concept of the consumer panel should be to include those consumers who are not regulated by the process. As it stands, if they are not practising solicitors or whatever, they are not regulated but they are consumers.

Jonathan Djanogly: I should put the hon. Gentleman right on that point: such people will not necessarily be practising solicitors, but they may well be.

John Hemming: We remember the phrase “qualified but non-practising solicitors” from Conservative amendment No. 219; that is all. The principle that consumers of services should be represented on the consumer panel is important.

John Mann: Conservative Members cannot help themselves. The profession requires regulation, but they want to water it down to protect vested interests, despite the fact that, under Standing Order 150(2)(c), advice will be required from the Parliamentary Commissioner for Standards on whether the amendments can be moved. I await his correspondence on that. I am sure that hon. Members have read the 2002 speech of the Chairman of the Committee on Standards and Privileges on what it is and is not entitled to do.
Leaving aside the inherent and extraordinary vested interest, to suggest stuffing the consumer panel with lawyers and finding a guise in which to do so shows a lack of understanding of what the real world feels about the problems of the legal profession. I hope that the Minister will outline the sort of people who should serve on the panel. First, there should be someone who has suffered industrial deafness, so that the absurd practices in the legal profession that have taken place for decades can be properly addressed by a decent, sensible consumer voice that says, “Run your profession properly and fairly, and then have the respect that you are due.”

Bridget Prentice: Sadly, I cannot view this amendment with the same positive attitude with which I viewed the previous one. I have listened carefully to the arguments about corporate consumers of legal services and whether lawyers and non-practising solicitors generally should be represented on the consumer panel. Clearly, there is a role for the corporate consumer on the panel, but I cannot agree that the prohibition on authorised persons sitting on it should be waived.
First, the establishment of the consumer panel has a distinct purpose: to ensure that the voice of consumers is clearly heard in the regulation of legal services. We have striven to shift the balance, as my hon. Friend constantly encourages me to do, from the interestsof the profession to the interests of consumers. Thatis the principle behind the Bill. To allow the panel’s independence from the legal profession to be compromised—the amendments would do that by allowing authorised persons to be members—would undermine that aim.
Secondly, I am not persuaded by the suggestion that authorised persons need to be on the panel, so that the representations of large corporations as consumers can be heard. If large corporations cannot find someone other than an authorised person to represent themon the panel, they are in a very bad way. I want to encourage large and small corporations to be represented, but I want them to be represented by people who are not authorised persons. In fact, under clause 8(4)(a), the board will be required to ensure that membership of the panel includes fair representationof business consumers, but they cannot be represented by a practising lawyer. That will not prevent representatives from the Federation of Small Businesses, which has representatives on our own consumer panel, or large industry that uses legal services regularly from being represented.

Kevan Jones: Does the Minister agree that it is important to have trade union representation on the consumer panel? Trade unions are large users of legal services.

Bridget Prentice: Trade unions will have an equal opportunity to present people to be members of the consumer panel, but they cannot put authorised persons on the panel. Providers of reserved legal services cannot be part of the body that is specifically set up to consider the needs of legal services consumers. Creating a body that voices consumer interests is important for those on the high street who have not had their concerns or opinions adequately heard in the past. I find this group of amendments wholly unpalatable.
On amendment No. 219, there is nothing to prevent “non-practising solicitors” sitting on the panel, as long as they are not authorised persons. “Non-practising solicitors” fall outside the definition of an authorised person, and therefore outside the prohibition inclause 8.
Talk of the principle of the independence of the legal profession has been heard loud and clear, not only in the Committee, but during six months of debate in the other place. We have heard the concerns about the principle very clearly indeed, but it must apply equally to the role of the consumer panel. If we in this House are the first to make that argument, so be it. The consumer panel must be independent of the influence of the legal profession. On that basis, I shall not accept the amendments.

Jonathan Djanogly: In response to the hon. Member for Bassetlaw, I am not and never have been an in-house lawyer. However, I recognise their rights as consumers, whereas the Bill does not. I shall put the hon. Gentleman right by saying that I did not suggest stuffing—I believe that that was the word he used—the panel with in-house lawyers; I simply said that they should be represented.
It might be that, generally speaking, corporate and qualified non-practising solicitors who are users of legal services are more business-savvy and so do not fall into some of the pitfalls that individuals and small businesses do, but the fact that the former group generally have more resources at their disposal does not mean that they do not have similar problems and issues that need to be resolved. Simply put, there are different types of consumer problems. Granted, corporate and non-practising solicitors might not face the same issues as those faced by individual users and small businesses, but that is exactly why they need fair representation on the consumer panel.
The whole idea of the panel is to give a voice to the users of legal services, whoever they might be. The panel must thus be adequately representative of all users. I fail to see how the Minister can justify the exclusion of corporate and qualified but non-practising solicitors, because they, too, are users of legal services. She is in danger of damaging the credibility and legitimacy of the consumer panel by taking such a negative position on the amendments. That would be a shame. She should think again, which is why we shall not be pressing the amendments to a Division. We will reserve our position for a later stage, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

David Burrowes: On a point of order, Mr. Cook. Reference has been made in the debate to proper standards and there are concerns about vested interests. Given the contribution on union representation, would it not be appropriate for hon. Members properly to declare their interests as regards union membership?

Frank Cook: I hear what is being said, but it is a matter not for the Chairman but for each individual Member. I suggest that the hon. Gentleman look at the Register of Members’ Interests.

Jonathan Djanogly: I beg to move amendment No. 218, in clause 8, page 4, line 21, after ‘appointed’ insert—
‘(a) by the Board following public advertisement and selection by the prevailing standards for selection of members of public bodies and’.
The amendment would mean that the chairman and other members of the consumer panel would not be appointed only on terms and conditions determined by the board, but would be appointed by the board
 “following public advertisement and selection public advertisement and selection by the prevailing standards for selection of members of public bodies”.
The additional wording is intended to ensure that appointments to the consumer panel are made and seen to be made objectively. It is important that all positions on the consumer panel be advertised publicly, so as to inform a wide and varied group of people about their existence. That will give all applicants a fair opportunity to apply for the panel. As a consumer body, the panel needs to represent the consumer. A public advertisement will therefore be the best means of ensuring that that is the case.
Additionally, it is important that the current criteria for selecting members of a public body be applied, so that all applicants are given, and are seen to be given, an equal opportunity to be selected. That is vital, as the consumer panel is the voice of the public and it ensures that consumers are given adequate representation. Any suggestion of favouritism in selecting members could only damage the panel’s integrity and cause people to lose faith in the efficacy of the Bill.
Finally, it should be noted that the amendment would enable the whole process of selection for the consumer panel to become more transparent. That is important if we wish to improve confidence in lawyers among consumers. The Government support the Nolan principles, so will the Minister confirm that they will apply to appointments to the consumer panel?

John Hemming: As the question of declaring membership of a trade union as an interest has been raised, I declare that I am a member of a trade union and that I have a vote in the Labour party’s deputy leadership elections. However, that is obviously not the question under discussion. The amendment raises an interesting point, which, as somebody with a track record in computer programming, I view as a problem within statute.

Henry Bellingham: Whom are you going to vote for, then?

John Hemming: I am not going to comment—[Hon. Members: “Ooh!”] To be fair, I have considered the question at great length, but I do not think that any of the candidates warrant my vote. However, that is not really in order. What is in order is to point out that many things in statute are similar, in terms of how matters are processed. We have a spaghetti systemof statute that has developed piecemeal. There isa substantial argument for simplifying it, so that reference is made to a standard form in the appointing of boards, for instance. We support the principles argued for in the amendment, but over time it would be better for the Government to consider developing statute in a more structured manner.

Bridget Prentice: The hon. Gentleman will have to tick the box, in that he upholds the principles of the Labour party if he decides to use that ballot paper. So I should be careful if I were him.
I have considered the amendment in some detail. In fact, an identical amendment was tabled in another place, so there is little between us on the issue of independence. I like to think that the Committee and consumer groups know that the Bill’s raison d’être is to put consumers at the heart of the legal system. The prevailing standards of appointments to public bodies are well known to members of the Committeeand, to answer the question that the hon. Memberfor Huntingdon asked, will be applicable to the appointment of the panel.
For that reason, there would be little to gain by including a more specific provision in the Bill to the effect that those standards must be followed. However, given that the appointments are to be made by the board and not by Ministers, there would, strictly speaking, be no compulsion to follow the Commissioner for Public Appointments’ code of practice. I can see why setting out those requirements in the Bill would give an assurance that the appropriate appointment practice would be followed, however, and for that reason I should like to take the amendment away for further consideration, because I agree with what the hon. Gentleman has said on the matter.

Jonathan Djanogly: The Minister said that Nolan would not apply in this case. We thank her for her constructive approach and look forward to hearing from the Government later. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

John Hemming: I am a bit confused by the complications of statute. Will the consumer panel be a bit like the House of Lords—will people be appointed to it but never removed? What will be the process for removing people from the consumer panel?

Bridget Prentice: When people are appointed to the consumer panel, they can be removed, and of course they can stand down. Clause 10 contains a procedure to deal with, for example, situations where representations of the consumer panel are being considered by the board, but it does not give any specific indication whether members of the panel can be removed. If that is a gap in the legislation, I shall have to consider it again to see whether we need to make the situation absolutely clear. I am grateful to the hon. Gentleman for raising the question.

John Hemming: I thank the Minister for sharing my confusion and I hope that we will achieve some clarity.

Question put and agreed to.

Clause 8 ordered to stand part of the Bill.

Clause 9 ordered to stand part of the Bill.

Clause 10

Representations by the Consumer Panel

Question proposed, That the clause stand part of the Bill.

Frank Cook: With this it will be convenient to discuss new clause 3—Professional representations—
‘Section 10 shall apply mutatis mutandis to representations by approved regulators whether in their regulatory or representive capacity.’.

Jonathan Djanogly: Clause 10 deals with the proposal that the board should be able to make representations to the consumer panel. My decision not to move new clauses 1, 4, 5 and 6 was tied to our proposal in new clause 3, which will hopefully be clearer now than if we had gone through all the other new clauses as well.
The new clause would cause section 10 to apply mutatis mutandis, or with required changes, to
“representations by approved regulators whether in their regulatory or representive capacity.”
I note that we have received a strong representation relating to the clause from the patent and trade mark institutes. Apparently, they met the Minister on 21 May at her request to discuss the changes made in the Lords and to bring any concerns before Committee. They discussed with her their disappointment at Baroness Ashton’s refusal, as they see it, to honour a commitment to accept this amendment in the other place.
On Report in the Lords, Baroness Ashton stated that she accepted the principle but not the wording of the amendment in Committee, and that on discussion with ministerial colleagues, she had been advised that the Bill provided a variety of means for consultation, and that no amendment was therefore necessary. The institutes felt that the Minister had simply reneged on her commitment. Apparently, they ran through the arguments again with her, explaining why they felt that professional representation was so vital. They argued that if the Government accepted the amendment in principle, they should table a Government amendment to make that explicit in the Bill.
My understanding is that the Minister refused their request, saying that the Bill already contained a number of obligations on the board to consult approved regulators. As something of a compromise, she committed to writing to the patent and trade mark institutes with a list of all the instances in the Bill requiring the Legal Services Board to consult approved regulators, in order to demonstrate that significant consultation was already explicit. My understanding, although I have to say that it is a few days old, is that the patent and trade mark institutes have as yet received no correspondence. Does the Minister intend to provide that information, and will she agree to present it to the Committee if she does?
The institutes welcome new clause 3, on professional representations. Lord Kingsland pursued the issue on their behalf at length in the Lords. The institutes have concerns about the lack of a requirement on the board to receive representations from approved regulators. The Minister has argued that all the regulators are free to make representations to the board, and that it would be expected to work in close partnership with them, consulting them and listening to their views.
The institutes believe that their position as regulators of a niche part of the legal services market, and their limited resources and membership, differentiates them from the likes of the Law Society or the Bar Council, which have larger resources. They also have grave concerns that their voice will be lost and their considerations overlooked by the board unless the Bill contains a direction or other positive statement that the board should have regard to representations made by legal services providers.
We have listened to the Government’s previous arguments against the establishment of a practitioner panel and understand their concerns that such a panel might jeopardise the role of the consumer panel, that it would be bound to be appointed by the board and that it is difficult to understand what provision could be made to ensure that any panel that the board appointed was representative of the regulated sector, rather than comprising people whom the board was happy to consult.
That position is supported by the Law Society and other regulators, so, accordingly, we did not move new clauses 1, 4, 5 and 6. Instead, we proposed a simple addition to the Bill to ensure that the Legal Services Board has a duty to consider any representationsmade by the regulatory or representative bodies of the professions. That approach mirrors the provisions in clause 10.
We were disappointed by Baroness Ashton’s response when the issue was raised on Report and on Third Reading in the other place and by the subsequent feedback that the institutes received in their later discussions with the Minister and her team in the Ministry of Justice. The institutes feel that Baroness Ashton backed out of a commitment that she made in Committee in the other place when she acceptedthe amendment in principle. On the back of that acceptance, she persuaded other peers to drop their later amendments, because the Government had accepted amendment No. 38.
We agree on that point and therefore propose that the Bill should explicitly state that representations to the board by the professions must be considered. The Government appear to have made a U-turn. We urge them to accept the amendment or, at least, to agree to return with another amendment to meet this important point.

John Hemming: We are inclined to support new clause 3, the argument being that we are asking that the board consider any point made to it and to respond with reasons why it disagrees. That is entirely reasonable. There is an interesting legal question about whether it would have to do that anyway, but it is far better explicitly to include such a provision in the Bill. It is only reasonable that the board should respond in writing to representations made to it, giving reasons for disagreeing with them.

Henry Bellingham: I should like to add a couple points to the excellent argument put forward by my hon. Friend the Member for Huntingdon. First, the Committee will be aware that the patent and trade mark institutes are small professional bodies and thus will be small niche regulators. I stress that their future could be put at risk, because they are not closed professional bodies in the sense that one could still practise as a patent or trade mark attorney if one were not a member of the relevant institute.
Such people join their institute to give themselves added credibility, clout and professional recognition. However, if they feel that the institutes are being cast to one side, not listened to and perhaps undermined over time, they will have every incentive not to pay their levy or fee to their professional association and to go it alone. Those two important institutes have been to see the Minister and the Department and have lobbied members of the Committee. The institutes feel strongly that if they lose their critical mass—we are only talking about 2,000 members in total—they could wither on the vine. That is why it is important that they are given extra standing and credibility under the new clause. My hon. Friend’s arguments are spot on.
I also agree with what the hon. Member for Birmingham, Yardley has just said. Looking at things in the round, I do not understand how anyone could disagree with the proposed new clause being added. If anything, it would add weight and muscle to the consumer panel. It would not, in any way, dissipatethe consumer panel’s impact; it would complement the work being done by it. I urge the Minister to consider the new clause sympathetically.

Bob Neill: I should like briefly to support the observations that have already been made by my hon. Friend the Member for North-West Norfolk. First, it is important to bear in mind that, if we are going to make the consumer panels system work, there must be a maximum buy-in from the organisations that responsibly seek to represent various elements of the profession. The trade mark and patent attorneys, with whom I have had no professional connection, dealwith a small but important area of work. Even large representative organisations, such as the Bar Council, find it difficult to ensure that people think there is value in joining and belonging to them. In fact, they can, within the structure of the Bill, do a valuable job, at a certain level, in self-policing.
It is much better that people in the trade mark field have an incentive to be members of an associationthat provides a pretty cost-effective, useful means of bringing together representative views. All the professional organisations in the legal sphere carry out a degree of valuable self-policing as well, which is sometimes not recognised. It is much better to give people an incentive to belong to such organisations than their being tempted to freelance. We should remember—others will—that, on the liberalisation of the conveyancing rules some years ago, there was concern that some people were attempting to operate outside any of the professional frameworks, which was for the worst. That has been dealt with. It is right that we should build in the incentive now, for the same reason.
Secondly, it is important and desirable to place an explicit obligation on the panel to state why it disagrees with representations from the professional bodies, as it may, for good reason. That point was fairly made by the hon. Member for Birmingham, Yardley. It struck me that the same principle was involved, albeit in a different context, in dealing with the Greater London Authority Bill. The Government have sought to strengthen the transparency of the relationship between the Mayor and the assembly, by placing a duty on the Mayor and the functional bodies in greater London to state why, having consulted and disagreed with the assembly, they disagree with it. That makes the whole process more robust from the point of view of the consumer, the professional bodies making the representations and the public at large.
The Minister and her colleagues have talked a lot about the importance of transparency, and the new clause would underscore that. I hope that the Government feel that the new clause is not trying to wreck or undermine the thrust of what they are trying to do, but that it is trying to make things better.

Bridget Prentice: The new clause would place approved regulators on an equal footing with consumers in relation to any representations to the board. I do not consider it to be necessary, because, as I have already said, there are many provisions in the Bill under which the board and the Office for Legal Complaints might consult and consider representations made by approved regulators. However, before I come to that, I endorse the comments made about the patent and trade mark institutes—those small but important bodies—and the niche market that they represent. I have met them and discussed their concerns. In relation my writing to them, they wrote to me on 4 June setting our their concerns, and I understand that I shall reply to them this evening.
Let me list some of the provisions in accordancewith which the board or the OLC must consider representations: clauses 31, 35, 46, 47, 50, 58 and 66, schedules 7, 8 and 9, clauses 78 and 81, a raft of provisions in schedule 10, clauses 143 and 145, clauses 127, 132, 133, 136, 141, 139 and 206, clause 179, schedule 4, clause 180, schedule 7, and so on. It is therefore a myth that the OLC and the Legal Services Board will not listen to representations from the legal profession, and I hope that by reading out that list of provisions that are already in the Bill I have squashed the myth.

John Hemming: Is the Minister therefore confirming that, if there were a disagreement, the OLC and the Legal Services Board would have to respond with reasons?

Bridget Prentice: Certainly, if the OLC was making directions, it would have to give reasons. In the general course of things, it would be good practice for the board also to give reasons for rejecting certain representations if representations had been made. I am confident that the position is already covered.

Jonathan Djanogly: To that extent, does the Minister intend to issue guidance to the panel?

Bridget Prentice: It is not currently my intention to issue guidance. The Bill is not designed to fetter the way in which the Legal Services Board will conduct its operations, and I do not want to impose any fetters, but I might consider whether it is appropriate to issue guidance.

Bob Neill: On that point, the Minister has said that she hopes that reasons will be given as a matter of course if there is a disagreement—I think that thatis the right view—but can she really envisage a circumstance in which it would be appropriate for the board or the panel not to give reasons? Given that it is almost inconceivable that they would not, will she—in the same constructive way that she indicated she would think again on a previous issue—reconsider whether an explicit requirement could be made, in guidance or in a short amendment to the Bill, to give comfort to all the political parties that good practice will be entrenched? Surely no harm would be done to the Bill’s purpose by making it explicit that reasons for disagreement should be given.

Bridget Prentice: In considering whether guidance should be given, I shall certainly look at the issue in the round and consider whether the hon. Gentleman’s suggestion would be an appropriate way to proceed.

John Mann: Before the Minister goes too far, willshe consider also that there might be extenuating circumstances? Let us take the examples of an inquiry by the Serious Fraud Office into certain practices or investigations that have not yet reached that stage but in which malpractice—perhaps routine malpractice—is suspected. There might well be a wish for pre-emptive action in such cases, but there might be reluctance to give precise reasons for a decision on the basis that providing too much detail of other activities could prejudice other regulatory action—for example, bythe SFO.

Bridget Prentice: My hon. Friend makes a good point, and that is exactly why I cannot commit todayto imposing a requirement on the board that it give reasons or to issuing guidance. As he has rightly pointed out, there are instances in which it might be appropriate for other action to be taken.
Before I move on, I have one other comment on the issue concerning patent and trade mark institutions that was mentioned by the hon. Member for Bromley and Chislehurst. If people opted out of those institutes, they could not exercise reserved services and they would not have rights of audience to conduct litigation associated with patent and trade mark work. They would be diminishing their own ability to do that work if they chose to opt out of the institute. That is an important point to make.
There is a general statutory right for the approved regulators, of which I have listed some already, to have their representations heard, and there will be an obligation on the board to provide a notice setting out its reasons when it disagrees with the regulators. To go further would be to create a system that is too heavily tilted towards the profession.
 I have said in previous sittings that it is well established and clear that authorised persons have well organised and well funded bodies to represent their interest. They have extensive experience of making representations to other regulatory bodies, and we need only to consider the way in which their representations were taken up successfully in the other place to know just how influential they are. Consumers need a general right of representation to balance that situation out, and the Bill creates that balance.
If the LSB fails to account of the authorised persons’ views in reaching a decision, they will be able to go to judicial review. They know how to. I do not have any fear that the authorised persons will not use all the powers that are available to them to ensure that their voices are heard.

David Burrowes: On the substance of the issue, however, is it not important that the Government continue to reflect on the clear-cut undertaking given in the other place to accept the amendment that has now been moved in this Committee? Not to do so would be ironic, given that we are dealing with regulatory objectives that include upholding the rule of law and the constitutional principle and convention in the other place, whereby such an undertaking should be properly followed through. It has not been followed through, and Lord Kingsland’s words still apply: the Government should be ashamed of themselves.

Bridget Prentice: When I conceded some of the arguments that were made earlier, I said that I could not accept them directly, because I had to take on board the views of others in the form of collective responsibility. The amendments would undermine the consumer’s voice, which is at the heart of the Bill. The legal professions are more experienced than anyone else in making their views heard, as they have done so clearly and successfully in the other place. It is time to redress the balance.
I draw hon. Members’ attention to clause 3, inwhich the board is required to be accountable and transparent. It must publish an annual report under clause 6, and use that opportunity to demonstrate that it has given proper consideration to the representations made by consumers and practitioners. Practitioners already have a strong voice in the system, and if Iwere to accept the amendment, I would undermine consumers’ weak voice and the Bill’s attempt to strengthen it. I therefore reject the amendment.

Jonathan Djanogly: I thank the Minister for confirming that she will write to the patent and trademark agents later today. It would have been helpful to have had that information for the debate today, but there we are. The hon. Member for Birmingham, Yardley and my hon. Friends the Members for North-West Norfolk and for Bromley and Chislehurst all made excellent cases, saying that the amendment is reasonable and straightforward. My hon. Friend the Member for Bromley and Chislehurst made the important point that it would improve transparency, and I agree with everything that they said. My hon. Friend the Member for Enfield, Southgate was right to make the point about the promise that was made by the Minister in the Lords, which has been broken.
The arguments have been put, and I do not want to go around the houses again. We do not consider that the Minister is right in her arguments, and I simply cannot see how the balance could be tipped in favourof regulators, as she put it, by what we see as a straightforward amendment. I thank her for agreeing to consider whether guidance will be published, but at this stage of the proceedings, I shall seek to press the new clause to a vote.

Frank Cook: Any decision on new clause 3 will occur later in our proceedings.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.

Clause 11

Advice and research functions of the Consumer Panel

Jonathan Djanogly: I beg to move amendment No. 222, in clause 11, page 5, line 10, after ‘Board’, insert ‘or on its own initiative’.

Frank Cook: With this it will be convenientto discuss amendment No. 223, in clause 11, page 5, line 16, at end add—
‘(4) In acting on its own initiative under subsection (1), the Consumer Panel shall not impose any costs on any of the approved regulators.’.

Jonathan Djanogly: We propose to insert the words “onits own initiative” on a probing basis. The proposal comes from current consumer bodies. The wording of clause 11 will permit the consumer panel to carry out research for the Legal Services Board and provide it with advice when it so requests. The amendment would enable the consumer panel also to carry out research and give advice to the board on its own initiative.
The amendment aims to ensure that the consumer panel has an active and real purpose. It suggests that the panel should be given some independence and the opportunity to investigate matters and pass on relevant findings and associated advice without having to wait to be asked by the Legal Services Board. That would enable the system to become far more dynamic and less static.
We are, of course, aware that such increased freedom on the part of the consumer panel will lead to further costs. As we have indicated in earlier amendments, the Conservatives are keen to ensure that such additional costs are not passed on to the regulators. It would be unjust to make them pay for research carried out by the consumer panel on its own initiative on consumers’ behalf. Therefore, we suggest that an additional amendment be made—amendment No. 223, which is self-explanatory.

Simon Hughes: My hon. Friend the Member for Birmingham, Yardley and I have added our names to the amendment. We are strongly persuaded that it should be introduced. It is consistent with practice in other regulatory bodies with a consumer panel. I gather that Ofcom’s consumer panel has the power to carry out research into any relevant area that it sees fit.
If we are to get good people to serve on the consumer panel, one of the things that they will want to know is that they are free to set their own agenda rather than having it set for them. The hon. Member for Huntingdon and his friends realised that there is a cost implication, and I thought that where that might fall would be left for the discussion. There is a potential cost implication, although the consumer panel will have a support system. It will take additional time if the panel decides that it must assess what it ought to do as well as what it is asked to do and work through the programme, so it is appropriate to debate where the additional cost will fall. Perhaps amendment No. 223 is the right proposal; it may be something else, but my hon. Friend the Member for Birmingham, Yardley and I are clear that the panel ought to have the power to take initiatives. I hope that the Minister is entirely signed up to this pro-consumerist amendment.

Henry Bellingham: I also endorse what has been said. As my hon. Friend the Member for Huntingdon pointed out a moment ago, the consumer panel must have direction and focus. It would be wrong for it to be purely a reactive panel. It must be proactive. Let us consider the various disasters that have taken place in respect of how the consumer is affected by a legal action—indeed, the hon. Members for Bassetlaw and for North Durham know well that it would have been useful if the consumer panel had been in place when case of the miners’ compensation scheme was going on, as it could have taken up the cudgels on behalf of the people who were afflicted by that appalling, ghastly saga.

John Mann: The hon. Gentleman is quite wrong.The last thing that I wanted was a body into which complaints could have been palmed off. I wanted—and want—effective regulation. Is he not in danger of going down the track of beefing up the consumer panel to such an extent that it can handle all the consumer issues and the Legal Services Board can wash its hands of them?

Henry Bellingham: I very much disagree with the hon. Gentleman, because they can work in tandem. Of course, we want tougher, better regulation of the solicitors, but that is separate from giving consumers a greater voice. If consumers feel that they have suffered a serious grievance, whatever action the consumer panel might take might well prompt the Legal Services Board to take regulatory action against particular solicitors. The two can work in tandem.
As far as commissioning research is concerned, I, too, considered the case of Ofcom. If one widens the remit of the consumer panel in such way, it will attract a higher calibre of members and will build up a body of research opinion that will build credibility over the years. The Bill is about improving the way in which legal services are run, and they are run for consumers—our constituents. What would happen if outside consumer bodies wanted to help the consumer panel with research programmes? For example, if the National Consumer Council or Which? decided that it would be sensible for the consumer panel to consider research programmes and wanted to work with it and, perhaps, to help sponsor research, would that be in order?
My hon. Friend the Member for Huntingdon andI are concerned about the cost implication. If the consumer panel builds up a huge amount of momentum and wants to take on many new challenges, there will be a cost implication and that is why we have had to qualify matters. We did not want the provision to become an open-ended commitment. We are conscious that the Minister and her colleagues are in a Department that faces financial constraints. We do not want to put too much financial pressure on her Department, but we also want the job to be done. I urge her to consider the possibility of using some outside resources if particular projects have merit and if the panel is proactive in a campaign. I hope that she will consider that and support our amendments.

Kevan Jones: I find it very strange that on the second day of our consideration, Conservative Front Benchers are talking about the rights of the consumer. Up to now, they have been trying to protect their vested interests, and the amendments are another attemptto do that. Like my hon. Friend the Member for Bassetlaw, I am concerned that if we are not careful the consumer panel will end up in competition or rivalry with the board. That would be a dangerous step, because it would weaken the role of the board. Such an approach is not inconsistent with Conservative policy these days, under which policies are put forward with no attempt to explain how they will be paid for. If we accept amendments Nos. 222 and 223, it is not clear who will pay for the research—as long as it is not the poor solicitors or the legal profession, who, poor as they are, could not be asked to contribute anything to such research. I resist the amendments. They have been portrayed as an attempt to help the consumer, but they are actually part of a cynical guise around an attempt to protect the vested interests of the legal profession.

Simon Hughes: The hon. Gentleman has not thought this through at all. The Government propose in the Bill that there should be a consumer panel; the hon. Gentleman seems to be arguing against not only the amendment, but the idea of a consumer panel—[Interruption.] Well, that was the clear implication; if I am wrong, what he said was not very clear.
It is fundamentally important that there shouldbe a consumer panel and that its representatives donot sit—with formal status, as it were—as a non-departmental public body such as the Legal Services Board. Those representatives should be able to make sure that there is an access point and response base for consumer issues. The amendment is consistent with the idea that there should be a consumer panel. If there is to be one, we should let it do its job, not hold it back.

Bob Neill: I often find myself agreeing withthe hon. Member for North Durham—on local government issues, for example. However, I am sorry to say that he is absolutely wrong on this issue. There seems to be an extraordinary illogicality to his position.
I rather resent the suggestion that the Conservatives have ever objected to the notion that the consumer is at the heart of the Bill. Perhaps the hon. Gentleman has spent so many years in the Labour party and trade unions that he has become an inveterate conspiracy theorist. We are talking about not a conspiracy todo down the consumer interest, but a proposal to advance it.
I am sorry to use an analogy from another piece of legislation, but it is apposite. During the passage of the Local Government and Public Involvement in Health Bill, we debated how we would make local involvement networks, or LINks, effective—how we would give them teeth and attract people of the right calibrewho would be an effective voice for patients. The Government seemed to accept that there was a need to empower LINks. That is what we are trying to do for consumers in this context: to empower the consumer panel. That is consistent with the Government’s own philosophy of the Bill. We accept that point, so I find it bizarre that Labour Members should try, by using rich lawyers as a smokescreen, to limit the scope for consumer panels to carry out research on their own initiative.
I know lawyers who do legal aid work, and they have seen not an increase, but a real-terms cut in their fees over the years. They do not necessarily come into the “rich lawyer” category. It would be very sad if, of all people, Labour Members started to stereotype. That would get us away from the real issue of trying to geta balanced regulatory framework, which, I accept, involves enhancing the position of consumers. It also involves respecting the position of the professionals. Enabling the consumer panel to take the initiative is to go in absolutely the right direction, not the wrong one.

Bridget Prentice: I have some sympathy with the arguments that have been advanced in so far as I agree that representations from the consumer panel will be hugely important in informing the board.
To ensure that the panel is equipped to do its job, we have provided that it must be consulted by the board in respect of certain key regulatory activities. The panel may also make representations to the board about any other matter. When it does so, the board must consider them and give the panel notice if it disagrees. Any such notice must state the board’s reasons for disagreeing with the representations. If it wishes, the consumer panel can publish any information relating to the provision of its advice.
I turn to how that might work. If the panel considers that there is evidence of a clear detriment to the consumer interest, it may make a representation to the board that it request that the panel carry out research into the matter. Such a representation could also specify that the board should receive and consider advice from the panel. If the board elected to disagree with such a representation, the panel would have to be provided with a justification for that disagreement, and it could then go ahead and publish that exchange.
Amendment No. 222 would allow the panel to conduct research of its own volition. A number of hon. Members have prayed in aid other consumer panels, but they are labouring under a misunderstanding of the role and powers of some of those other panels. Ofcom’s consumer panel can provide advice of its own volition, but only in very specific circumstances under section 16(3) of the Communications Act 2003. As far as I am aware, neither the Financial Services Authority nor Ofcom consumer panel have the power to undertake research of their own volition. I do not know of any other statutorily provided consumer panel having that ability.
In the Bill, we have given the consumer panel more powers than those available to others. In fact, I would argue that Ofcom’s consumer panel is more restricted in its ability to carry out research than the panel of the Legal Services Board.
Amendment No. 223 states that the cost must not fall on the approved regulators. In that case, on whom must it fall? If the implication is that it would fall on the Government, in effect, that means the consumer. In fact, the Bill states that, after the transitional period in which the Government contribute to the cost, the Government will play no further part. It is for the legal profession, which is to be regulated, to bear the burden of that cost. Therefore, even if the amendments are accepted, it is inevitable that the cost will fall on the legal profession.
Amendment No. 223 is problematic because it does not indicate who should bear the costs. I understand what it seeks to do, but the amendment is flawed in itself and in its principle because the implication is that the cost will fall on the consumer. In fact, once the board is up and running, the costs will fall on those who are being regulated.
When the board identifies an area that needs regulatory scrutiny—or a representation has been made by the panel that identifies such a need—it is important that the panel is available to undertake that research and to advise the board on the potential impact on consumers. There would be a real danger that the panel might be unable to honour that request if it is dedicating time, manpower and other resources to research projects of its own.
Finally, there are no safeguards in the amendments to ensure fairness or to prevent misuse of power. Nothing in the amendments would stop the panel from conducting irrelevant research, incurring exorbitant costs, or providing that the board need not act on the advice. The amendments contain no clear lines of accountability. They are flawed in themselves and in the principle that they are trying to express. On that basis, I ask the Committee to reject them.

Simon Hughes: The hon. Member for Huntingdon will make his own decision but, unless I am mistaken, I detect a bit of resistance from the Minister. Some of her arguments are good, although some facts need checking. I am not persuaded by her arguments, but I am happy to consider them further. If the amendments contain flaws, I am sure that that we can improve them.

Jonathan Djanogly: As the hon. Member for North Southwark and Bermondsey says, we are not convinced by the Minister’s argument. My hon. Friend the Member for Bromley and Chislehurst was right to say that the Conservative party is concerned about the rights of the consumer. I echo that remark. Many amendments tabled by Conservative Members that we have discussed so far have been in the interests of the consumer. Sometimes they have questioned who the consumer is and sometimes they have examined how the existing Bill has been adapted, but they have certainly considered the rights of the consumer from the consumer’s point of view.
Once the hon. Member for North Durham had got over his fixation with vested interests, he suggested that the board and the panel would come into conflict. I thought that my hon. Friend the Member for North-West Norfolk answered—

Frank Cook: Order. I make a further plea for forgiveness for my misunderstanding of the starting time of our proceedings this morning.

It being twenty-five minutes past Ten o’clock, The Chairmanadjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at One o’clock.